Having dealt with properties in 5 different states in over 6 years, owned/lived, flipped, and some rented and now one Lease option with R20), I am still struggling with how to structure entities that really works. Particularly when I enter another new market.
Having read about and researched some about Series LLC, they are all specific to individual state. for ex, DE, TX, IL etc.
However I would like to know if anybody can point out or help with the following.
Setting up a DE series LLC and for transactions in each state, FL, TX, CA, MA etc, have one each series per state. The state specific entity will deal in everything within that state, be it flip, wholesale, rental or development, etc.
Having worked in IT jobs for long time and realizing that one skill mastery can only take you so much further, and in today's scenario one has to be master of some and jack of all, adopting it in RE as well, but structuring the business in terms of liability and protection has be the pain in all corners. I know many folks only concentrate in one location and may not face the questions I have.
Still want to put out my scenario and see what experts ( or not ) have to say. Appreciate any advise or points.
You should check out your target states and see if a foreign LLC can just 'own' property without having to register or pay any state-level taxes. If all the target states allow this, then you might be ok with your DE series single holding company. You might even be ok if you have to register it in each state.
Then, you could set up an Operations LLC in each state where you'll have activity and have that LLC be the one doing the deals, signing contracts, etc..
For my Texas REI clients, I advise against the holding company also being the operations company if they can swing the extra LLC. I also don't like one Series to be the holding company and one Series to be the operations company for separation purposes.
Sit down with a lawyer in your jurisdiction and discuss what he thinks for a structure. You really don't want to be DIY'ing a series LLC or using a non-lawyer; they're too technical.
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